The Cash for Clunkers (a.k.a. C.A.R.S.) program is a car industry bailout dressed-up as a green initiative. The University of California has put some numbers to the boondoggle. According to a study by UC Davis transportation economist Christopher Knittel, Uncle Sam’s taxpayer reach-around is paying 10 times the “sticker price” to reduce emissions of the greenhouse gas carbon dioxide. At least. “While carbon credits are projected to sell in the U.S. for about $28 per ton (today’s price in Europe was $20), even the best-case calculation of the cost of the clunkers rebate is $237 per ton. When burned, a gallon of gasoline creates roughly 20 pounds of carbon dioxide. I combined that known value with an average rebate of $4,200 and a range of assumptions about the fuel economy of the new vehicles purchased and how long the clunkers would have been on the road if not for the program,” Knittel said. “I even assumed drivers didn’t change their habits, although some analysts have suggested that the owners of new vehicles will drive more than they would have with their old cars.”

In the end, the lowest cost to remove one ton of carbon from the environment was $237. More likely scenarios produced a cost of more than $500 per ton, even when we accounted for reductions in pollutants other than greenhouse gases. That suggests the Cash for Clunkers program is an expensive way to reduce carbon.

Liberal politicians (on both sides of the isle) can’t wait to completely destroy the US economy. Does any of this surprise anyone? Given the blind insanity behind the program, C4C may never end as long as those responsible are in power. I almost feel sorry for those citizens who turned in their old but paid for cars in order to buy/lease a new car, and later find out they cannot make the rent payment. Oh well, the repo man will stay in business, that much is certain. Great going, politicians.

What is this GHG of which you speak? C4C is about keeping the UAW employed in the government workforce. If you can buy a truck with still crappy mileage under the rules, then it ain’t about CO2 reduction.

Liberal politicians (on both sides of the isle) can’t wait to completely destroy the US economy. Does any of this surprise anyone? Given the blind insanity behind the program, C4C may never end as long as those responsible are in power.

NAIL ON THE HEAD!

It is a very simple fact that you cannot spend your way into prosperity. Such a shame that our elected officials do not understand that. Thy think that you must SPEND MONEY…to keep from going bankrupt.

I take it that you haven’t been paying attention for the past eight or nine years?

Oh…you mean like how we had economic GROWTH under Bush? How when Bush left office, the economy was 19% LARGER then when he entered?

Or how about how the unemployment rate was at 4.7% under Bush…as opposed to the 5.2% under Clinton…and currently 9.4% under Obama.

The seasonally adjusted unemployment rate rose from 4.2% in January 2001, peaking at 6.3% in June 2003 and reaching a trough of 4.4% in March 2007. After an economic slowdown, the rate rose again to 6.1% in August 2008 and up to 7.2% in December 2008. [55] From December 2007 when the recession started to December 2008, an additional 3.6 million people became unemployed. [56] And, in January 2009, his last month in office, the nation lost 655,000 jobs, raising the unemployment rate to 7.6 percent, the highest level in more than 15 years. [57]

Much of the “growth” came from borrowing:

A significant driver of economic growth during the Bush administration was home equity extraction, in essence borrowing against the value of the home to finance personal consumption. Free cash used by consumers from equity extraction doubled from $627 billion in 2001 to $1,428 billion in 2005 as the housing bubble built, a total of nearly $5 trillion dollars over the period. Using the home as a source of funds also reduced the net savings rate significantly.[65][66][67] By comparison, GDP grew by approximately $2.3 trillion during the same 2001-2005 period in current dollars, from $10.1 to $12.4 trillion.[68] Economist Paul Krugman wrote in 2009: “The prosperity of a few years ago, such as it was — profits were terrific, wages not so much — depended on a huge bubble in housing, which replaced an earlier huge bubble in stocks. And since the housing bubble isn’t coming back, the spending that sustained the economy in the pre-crisis years isn’t coming back either.”[69] Niall Ferguson stated that excluding the effect of home equity extraction, the U.S. economy grew at a 1% rate during the Bush years.[70]

Take a look at Bruce Bartlett’s view on the current mess (the guy is not a liberal – he left the republicans to become an independent):

Remember that CrownVic, he of the perennial “I hate Ford” comments, cannot be persuaded that Ford is doing something decent.

Bush also had the option to not bail out GM and Chrysler, but punted on making the final decision. And at that point Obama was a huge favorite to win the presidency, so he knew who was going to get to decide.

At least the current administration is trying to do proactive things instead of scrambling to react to events.

The main point of the C4C program is to jump start the new auto business. So far it has actually been accomplishing its main goal.

The environmental upside is a bonus. Nobody advocating for the C4C program ever claimed that financially it was the most efficient way cost:benefit wise to reduce CO2 emissions or pollution. Put another way, if we have a decent economy and a “normal” automotive new vehicle market, the C4C program would never have happened.

“Liberal politicians (on both sides of the isle) can’t wait to completely destroy the US economy.”

Personally I don’t believe that there are very many liberals or conservatives who want to destroy the US economy. Well, excepting those who wish to hurry us towards Armageddon, but I think they are still a small minority. It is quite possible to disagree strongly with someone on economic policy without going overboard into accusing them of wishing for the destruction of the other side.

BTW, has anyone really proven the veracity of the “carbon credits” being sold in various markets? Many of the schemes behind those things are highly questionable.

John Horner : The main point of the C4C program is to jump start the new auto business. So far it has actually been accomplishing its main goal.

Leave it to a car guy to come up with an associated metaphor. The truth is, that an economy, much less an industry, does not need to be “jump started.” The business cycle is, in many respects, due to government mis-allocation of investment away from the private sector. All that does is allocate market led investment (re: individual citizen choice) into areas which the individual did not see fit to invest. It is a gross distortion, with usually unintended consequences (such as those actually able to afford a new car holding off making the purchase because they cannot compete with government subsidies). This is just bad economics, especially since it is financed by either borrowed or created dollars.